A penny saved may be a penny earned, as the adage goes, but a penny invested in your professional image can become many dollars earned. Conversely, money withheld at the wrong time can keep your small business mighty small, both in image and in fact.

Certainly we all admire thrift, and even large enterprises are careful to watch the bottom line-no matter how assured their success. But many people who launch new businesses are so unsure of their viability that they practice penny-pinching where it hurts their future most. It’s as if they are saying to themselves, "I better not spend a lot starting out, so if the venture fails I won’t have lost so much."

A common trait among inexperienced entrepreneurs is to cut corners all over the place in a misguided effort to make their startup capital go as far as possible. This can backfire. For example, you’ve probably been handed a business card that was obviously purchased at the rate of 500 for $19.95, printed while you wait, with a generic clip art logo of some kind. No doubt you tossed out that card before the end of the day.

Another pitfall encountered by independent-minded entrepreneurs, who are lured by the prospect of not having a boss above them, is that many don’t want to delegate to staff below, either. Wearing too many hats to save on salaries and benefits can doom an enterprise before it ever gets off the ground.

Even if you aren’t inclined to put an assistant on the payroll, identify the areas where you really should delegate tasks-such as accounting and tax preparation–and farm out the work to another independent so you can concentrate on what you do best. Recognize that part-timers are often anxious to join a budding enterprise, and feel honored to learn the ropes from a motivated entrepreneur. While trying to fill all the roles in your business can work, it puts you at risk of being competent at everything, but brilliant at nothing.

A further aspect of self-sabotage rears its head when the freedom-loving entrepreneur needs an outside investor to launch or to grow an enterprise. Many experienced venture capitalists will require a fairly large chunk of equity shares in any business they invest in, and chronically independent souls may balk at yielding any of their dream company, let alone the 51 percent control that might be demanded of a promising but risky new operation.

So consider the saying, "It’s better to own a small slice of a very big pie, than to own all of a very small one." The fiercely independent business person who can’t bear to give up any control to a vitally needed investor may wake up one day "condemned to freedom."

The opposite of being too cheap is spending beyond the budget so as to appear successful, in the belief that looking like a millionaire will somehow attract clientele and make that entrepreneurial dream come true. It’s all too tempting to take on unreasonable debt in order to make that new small business look as if it were practically born in the black. But as experts warn, credit is what enables someone to start out with absolutely nothing and dig a very deep hole.

Of course, if you’re going to drive clients around to real estate sites, for example, and are still driving the battered car your uncle gave you 15 years ago to go off to school, it may indeed be wise to finance a new automobile-but not necessarily a top-of-the-line convertible.

Entrepreneurs tempted to run from store to store to save money on office supplies and other business purchases should take a lesson from professionals, consultants and tradespeople who charge hourly rates. It doesn’t pay to make a one-hour round trip to purchase cheaper office supplies if your hour is worth much more than the dollar amount you’re saving.

Instead, delegate these errands–or shop closer to home even if you have to pay a higher price, and use the precious and irreplaceable time you save to do something profitable and enjoyable. You can always earn more money, but you can never earn more hours in the day. Use them as the rare commodity they are.

If you must spend a lot of time behind the wheel shopping for vital savings–or driving from client to client–make the most of those hours by occasionally listening to a tape that will enhance your personal or business knowledge.

Consider this: sending a proposal or portfolio of samples by third class mail (the least expensive option) looks tacky compared to overnight or second-day delivery available through the post office or private shipping services. Of course, if your funds are limited and you must stretch them over hundreds of shipments, there may be no realistic choice. But as a general rule, saving money while prolonging delivery time and projecting the impression of a threadbare business is a bad investment in today’s environment.

If there is any place where a naturally thrifty entrepreneur should not economize unduly, it’s in the printing of letterhead, envelopes and business cards. Using "while-U-wait"-type sources for these essential operational tools will shout to all your existing and potential customers-and to your competitors-that you are barely getting your toes wet in the business world, or are years away from having a serious enterprise. It will also announce that you lack a sense of quality, which will make prospects doubt your ability to deliver quality to them.

This warning applies equally to the design of other promotional materials, including the brochure that will "speak" for you, telling the story about your product or service. Too many people mistakenly think that they are instant designers just because they have desktop layout and graphics software, as well as a vast library of type fonts. If you are untrained, wearing the additional hat of a graphic designer may make you look like a dunce.

Get a referral for an accomplished graphic designer, and spend the money it takes to develop a truly professional printed image. That may even include a trademark or logotype symbol to put on all your mailing labels, cards, promotional and other materials. If you are a manufacturer, it may appear on your products as well.

If you opt not to get professional design assistance, in the name of saving money, you may well wind up with business cards that have a clip-art image that’s been used everywhere before, from neighborhood association newsletters to matchbook covers.

There’s a double-edged twist to the problem of being a grinch. Not only may you be too tight to spend where it counts, but you may also not earn what you deserve by keeping your prices too low, which can defeat your enterprise in three ways. First, it makes you look desperate for business, which usually attracts few customers–or the wrong ones.

Second, it creates a low perceived value in the marketplace, as most of us believe that "you get what you pay for."

Third, underpricing yields very low or no profits. It’s far wiser to scope out your competition and price your services or products at the same level, or a bit higher or lower. This establishes you in the marketplace. You can always revise your prices after you see how you’re doing in terms of customer loyalty and buying resistance-all the while keeping tabs on any adjustments your competition makes. If you want to stand out, add value by giving superior service or discount incentives; just don’t short-change yourself.

In today’s business climate of minimal inflation, good productivity growth and a generally expanding economy, finding your own balance between being too cheap to succeed and too reckless to budget is more important than ever.

Excerpted with permission from Small Business Success, Volume XI, produced by Pacific Bell Directory in partnership with the U.S. Small Business Administration.